Daily GPI

On the surface, a straightforward purchase of California’s second merchant underground natural gas storage facility is taking on major policy implications. It could provide a view next week of just how hard-and-fast the split is between pro-market and pro-enforcement regulators at the state regulatory commission.

Tengasco Inc. reported a second quarter loss of $858,197, or 9 cents per diluted share, versus a loss of $336,034, or 4 cents per diluted share for the second quarter in 2001. Among other things, the company attributed the loss to a “substantial decline” in natural gas and oil prices. Revenues declined 30% for the quarter and 23% for the first six months of the year.

Texas Eastern said Wednesday the Wilcox Line in South Texas between the Hagist station site and Charco Compressor Station will return to service Friday evening, and nominations for receipts in this segment will be accepted for Saturday’s gas day. At the end of July Texas Eastern had estimated that the Wilcox outage would last about four weeks (see Daily GPI, Aug. 1).

FERC at its Wednesday meeting issued Kern River a certificate to build its long-awaited 2003 expansion project, which would more than double the existing capacity of the Wyoming-to-California pipeline. The move opens the door for the construction of a huge new conduit for nearly 900 MMcf/d of additional natural gas to exit the Rocky Mountain region and head to the flood of new power plants in Nevada and California starting next May.

FERC at its Wednesday meeting issued Kern River a certificate to build its long-awaited 2003 expansion project, which would more than double the existing capacity of the Wyoming-to-California pipeline. The move opens the door for the construction of a huge new conduit for nearly 900 MMcf/d of additional natural gas to exit the Rocky Mountain region and head to the flood of new power plants in Nevada and California starting next May.

A moderate amount of strength in the Rockies was the major exception Wednesday to a generally mixed bag of prices. Non-Rockies numbers were mostly flat but also ranged up to about a nickel higher or lower in some cases. Transco Zone 6-NYC took the only big fall of a little more than 50 cents.

Similar to other recent forays above the $3.00 mark, Wednesday’s price surge in the natural gas pit at Nymex was short-lived as locals and speculative accounts liquidated new longs and reinitiated short positions. After topping out at $3.04 at 10:15 a.m. EDT, the September contract shuffled lower throughout the session, ending down 6.5 cents at $2.91. Estimated volume was moderate, with 93,329 contracts changing hands.

The current crisis in the energy trading market largely will have blown over by the time 2003 rolls around, predicted John Olson Wednesday. He is probably best known as the industry analyst who suspected something was rotten in the state of Enron well before anyone else, earning himself an unfavorable reputation in the Enron executive suite prior to the company’s collapse.

In a blistering attack on another energy company on Wednesday, Apache Corp. Chairman Raymond Plank called The Williams Companies an “Enron Clone” that used monopoly power to manipulate Gulf Coast gathering rates levied on producers.